Tales of two more projects

Earlier this year I wrote a post about two development projects that were staggering through the approvals process in Santa Monica. One was an apartment building on Lincoln Boulevard, replacing worn-out automobile repair shops, and the other was a hotel project, the one Frank Gehry has designed for the prominent corner of Ocean Avenue and Santa Monica Boulevard.

Two similar projects are now plodding towards their respective destinies. One consists of two apartment buildings that are being developed together and which are considered as one project for environmental review. The other is the redevelopment of the Miramar Hotel, for which new plans were publicly released earlier this year.

The two apartment buildings will be built near the beach on land adjacent to the Shutters and Casa del Mar hotels. They will replace two vacant lots—the parking lot behind Shutters with frontages on Ocean Avenue, Pico, and Vicente Terrace, and the space just south of Casa del Mar on Ocean Front Walk.

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Vacant lot on Ocean Front Walk, just south of Casa del Mar Hotel.

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Vacant lot on Ocean Avenue, behind Shutters, between Pico and Vicente Terrace.

The format and programming of the apartments, designed by local architects Koning Eizenberg, conform to that of apartments that both for-profit and affordable housing developers in Santa Monica have been building for about 20 years in commercial zones. Meaning that three or four stories of apartments sit above underground parking and (in most but not all cases) ground floor retail. This model has served Santa Monica well since new zoning that encouraged housing in commercial zones was first adopted in the 1990s for downtown.

Ocean Vicente Terrace Corner

Architect’s rending of proposed apartments between Shutters and Ocean Avenue.

Given that these new apartments on vacant lots won’t displace anyone, given that they are in a busy part of town that has been intensively developed (with many buildings much larger than these) for about a century, and given that they aren’t taller than the hotels next to them (and step back to respect the shorter buildings they will face on Vicente Terrace), one would think that getting approval for these buildings would be easy. Further, the developers have tried to make the process easy on themselves, by asking for no variances from the applicable zoning other than some minor technical adjustments to take into the account the significant slope on the Ocean Avenue lot.

However, the developers are building a “Tier 2” project, which means they have to through a development review rather than an administrative approval. This entails, among other things, an expensive and time consuming environmental review which at the end of the day, for infill projects like these apartments, doesn’t tell you anything you didn’t know already. It’s perverse to make it harder to build Tier 2 at this scale, because the public gets more from a Tier 2 project than it does from a Tier 1. Face it, we only make approval harder and more expensive and less predictable for Tier 2 because it’s expected (but not necessarily true) that a developer will make more money from a bigger building. It’s more envy than anything else.

As for public benefits, a Tier 2 project must provide affordable units at a 50% higher rate than Tier 1, and of course, a bigger project produces more affordable units than a smaller project even without the bonus. If you want to house people, you have to build housing. (Also worth noting if you like affordable housing: the City owned the property next to Casa del Mar and sold it to the developers for more than $13 million, money that the City has put into its affordable housing fund. That amount of money was only paid because the property could be developed.)

As it happens, applications for these two apartment buildings were filed in September 2015, three years ago, and they are only now (Wednesday night, in fact) coming before the Planning Commission.

No surprise, but the apartments face neighborhood opposition. A new neighborhood group, South Avenue Residents (SOAR), which represents at least some neighbors on Vicente Terrace, filed a comment letter to the draft EIR with 67 comments. I have read many EIR comment letters, but I recommend this one in particular as a definitive catalog of first-world complaints. My favorite comment in the letter is number 42: “There are multiple dogs and cats living with their owners on Vicente Terrace. How will the developers compensate owners for special care of their animals during construction?”

This attitude of the beach dwellers is nothing new. Twenty years ago when I was on the Planning Commission there was an issue about hours of operation for Pacific Park. A woman, who later became prominent in Santa Monica’s no-growth community, testified that she had recently moved to an apartment near the Pier and she was shocked at how much noise and activity there was on Ocean Front Walk. She said that when she was moving here to the beach, she thought it was going to be like Mendocino.

Disclosure: longtime readers of mine know that when I wrote for the Santa Monica Lookout News nearby neighbors on Seaview Terrace provided plenty of grist for my mill. I’ll confess that I was in part drawn to writing about these new apartments for the opportunity to check in on what was going on in the neighborhood. It was like old times to see that once-serial project opponent Stephanie Barbanell had submitted two comment letters to the EIR. Ms. Barbanell once told neighbors that she considered her opposition to development projects (in particular, any licenses to sell alcoholic beverages) a form of conceptual art, but in recent years she’s been quiet. Good for her that she’s expressing herself again!

Ultimately, building apartments and some ground floor retail on these sites makes sense because the zoning prohibits nearly everything else. The area is under the control of Measure S, passed in 1990 to stop hotel and large restaurant development. What better to be built on these vacant lots than housing? (There may be up to three small restaurants as well.) Would the neighbors prefer an office building? (I’m sure there are tech billionaires who would love to be able to take a break and surf whenever the waves are good.) Anti-development residents in Santa Monica like to go on about how much quieter Santa Monica used to be, as a “sleepy beach town,” but what if someone wanted to bring back Pacific Ocean Park? Or even just put an amusement arcade on these lots? I’m sure the neighbors would love that.

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The revised plans to remake the Miramar Hotel and add condominiums that were released last April were the third major iteration of the plans. The plans are the product of nearly 10 years of controversy. The Miramar and the proposed office and housing project at the Paper Mate factory were the major catalysts for the revival of the development wars in Santa Monica after the approval of the LUCE in 2010.

The revival of the development wars climaxed with the defeat of the Paper Mate plans in 2016. Since then, however, after the defeat of Measure LV in November 2016 and the approval of the Downtown Community Plan (DCP) in the summer of 2017, there has been less heated rhetoric and fewer political battles about development. In the meantime, the Miramar brought in a new team of developers and new architects, the internationally famous firm of Cesar and Rafael Pelli.

The new team appears, with their new plans, to be committed to not igniting another conflagration. They have been more communicative with nearby residents and other locals than the earlier development team. Most important, the new plans fit inside the envelope for the site that the DCP provides. Previous plans required substantial changes to the existing land use parameters.

While the plan includes 60 condominiums, which are controversial in Santa Monica because residents who live in houses worth millions of dollars don’t like to think of their sleepy beach town as a place where rich people live, it also provides for 30 units of affordable housing. Again, as with the beach apartments, while it’s true that rich people, including dreaded Russian oligarchs and Arab sheiks looking for new pieds-à-terre, will now have new housing options near the beach, so will more poor and working-class people.

If the plan were going through the approval process now, during the lull in the development wars and not too long after City Council adopted the DCP, I suspect that it would fare well. Unfortunately for the plan, however, it’s now in environmental review jail—an EIR is being written (and yes, for a project this big an EIR is appropriate), and that typically takes more than a year. Then the plan will run a gauntlet of approvals: Landmarks Commission, Architectural Review Board, Planning Commission, City Council and Coastal Commission. It will be at least a couple more years before the plan might win final approval.

Time is the enemy of all plans because time is the enemy of certainty. The Miramar’s developers crafted their first plan (one I didn’t think was very good) in consultation with the City’s planning staff. At a City Council hearing, the plan was shot down because it blocked too many views. The council advised the developers to come back with a tall skinny building, to preserve more views. Which the developers did (with another not-very-good plan), but by then the council had forgotten what it had said about a tall tower, and that plan went nowhere.

It was after that debacle that the Miramar brought in its new team. They waited out the DCP process to see what it would allow them to build. Now they have given us the new plan, which is, by the way, quite good.

But in two years, who knows that the City will be telling them they can build.

Thanks for reading.

Local politics: disconnected

I spend too much time on Facebook, but I have learned a few things there. One is that there’s a disconnect between local politics and the other kind.

On Facebook there’s a daily conversation among a few hundred avid followers of and participants in Santa Monica politics. In the ocean of Santa Monica voters, we Facebook posters (and lurkers) are only a few fish, but the volume of the stream of consciousness can approach the flow of a river and the decibels of a waterfall.

The discussions can become, or even start out, heated. But what’s funny is that when it comes to national politics—namely, the presidential election—nearly all the Santa Monicans violently “commenting” at each other about the City Council, or Measure LV, or any other local thing, find themselves in agreement that electing Donald Trump would presage the apocalypse.

I might read a post from a Residocracy member that drives me crazy, but if I click on another link I might find out that this same person just posted a video about why Hillary Clinton should be president. This doesn’t mean that all Residocracy members or other supporters of Measure LV are liberals like me, as some of them don’t support affordable housing and from some of their posts one can detect various reactionary or libertarian views. Nor, by the way, are all opponents of LV liberals—it’s not surprising that there are  property or business owners, who oppose LV, who are conservative.

What one often notices from the pro-LV posts is an attempt to fit LV into a liberal, progressive ideology. Many LV supporters are convinced that stopping the building of market rate apartments will keep housing prices down. Their logic seems to be that because developers can charge high rents for the new units the rents on the new units will increase the average cost of housing in Santa Monica. That logic is convoluted, but okay, it’s a logic.

Then there is the greed of developers. There are times I’m on Facebook and I wonder if I’ve traveled back in time, to a Depression-era Leninist study group. Most pro-LV arguments ultimately devolve into calls to arms against those archetypal capitalists, real estate developers. It’s all about how obscene their profits are, or how high their rents are, ignoring the fact that they can charge high rents and make so much money because of the housing shortage restrictive zoning has created. (And anyone who opposes LV must be on the developer take.)

Hey, we live in a capitalist society. That’s how we assemble the capital it takes to build nearly all the housing in this country. Everyone in Santa Monica lives on a lot that was subdivided by a developer to make money, and most live in buildings built by them for the same purpose. (In Santa Monica many (but not all) of those who complain bitterly about the greed of housing developers also have opposed tax measures the City has put on the ballot to create public funding for housing, such as H and HH in 2014 and GS and GSH on this year’s ballot. Meaning that they are against both capitalist and socialist models of getting needed housing built. But then we also have residents who insist that they favor more housing, but who also insist that studio and one-bedroom apartments are too small and condominiums are too big. The privilege of the housed?)

I don’t doubt the liberalism of these anti-development Santa Monicans. The reason I don’t is that one can sense the anguish they feel when they are confronted with evidence that progressive opinion favors infill development in existing cities, like Santa Monica, to create livable, attractive cities that retain and attract investment that would otherwise go to sprawl. I.e., favors what LV opposes. There’s big cognitive dissonance when people who consider themselves progressive, especially Baby Boomers who were on the barricades in the ’60s, hear over and over that they are on the wrong side of history when they demonize urban development. On Facebook, you can practically hear the gnashing of teeth.

The progressive arguments favoring cities against sprawl began as a reaction against the negative consequences of suburban development. The Sierra Club, for instance, first adopted policies favoring infill development 30 years ago. Around the same time movements like New Urbanism and Smart Growth began to preach an anti-sprawl gospel that celebrated traditional urban neighborhoods. Like the proverbial ocean liner, the course of urban policies took a long time to correct, but the speed in the direction of good city building and away from sprawl is accelerating.

Our president, Barack Obama, has always favored urban investment as opposed to suburban development. Back in February 2009, shortly after taking office, he told an audience in Florida that, “[t]he days where we’re just building sprawl forever, those days are over.” Many of the President’s policies during his eight years in office have supported better urbanism, and last month his administration published a “Housing Development Toolkit” that combined explanations of many progressive urban policies in one document.

From a Santa Monica perspective, the toolkit reads like a manifesto against Measure LV and the “build it somewhere else” culture of restrictive zoning that spawned LV, with quotes that eerily describe the situation on the Westside in general and in Santa Monica in particular:

Local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently, zoning restrictions, off-street parking requirements, arbitrary or antiquated preservation regulations, residential conversion restrictions, and unnecessarily slow permitting processes. The accumulation of these barriers has reduced the ability of many housing markets to respond to growing demand.

While the housing market recovery has meant growing home values . . . barriers to development concentrate these gains among existing homeowners, pushing the costs of ownership out of reach for too many first-time buyers.

Space constrained cities can achieve similar gains [in housing], however, by building up with infill, reducing the eyesores of empty lots and vacant or rundown buildings that go undeveloped in highly constrained regulatory environments.

Unsurprisingly, many cities with the highest local barriers [to building housing] have seen increases in homelessness in recent years, while nationwide homelessness has been sharply in decline.

The fact that liberals and progressives who support LV and similar anti-development policies are at odds with current liberal and progressive policies doesn’t mean that one should not be skeptical about those policies. One should always be skeptical; today’s pro-urban policies exist only because of skepticism about policies that were once considered progressive and had government support, such as urban renewal, modernist public housing blocks, and conventional suburban development.

Those policies created new problems, and those problems required new thinking. But to be progressive one has to believe in progress. You can’t be progressive if you favor nostalgia and fear change. But progress is conservative in that it must be based on trial and error, i.e., learning from one’s mistakes. Today’s progressive urban policies weren’t created from thin air. They arose from analyzing the mistakes of generations past, such as modernist planning (urban renewal, freeways, etc.) or conventional suburban development.

We can’t predict the future, but we can avoid making the same mistakes that previous generations made. One of those mistakes was building sprawl instead of investing in our cities.

Thanks for reading.

Housing is Complicated, Post #2

In my last blog post I wrote about how affordable housing policy has interacted with the politics and economics of development in Santa Monica. In this post I’d like to look beyond that to some of the forces that shape the market for housing.

Housing attracts contradictions. Start with price. People generally complain when housing prices are too high: it’s not good when people have to spend too much of their income on decent housing (or even worse when they spend too much of their income on substandard housing).

But then bad things also happen when prices are too low. Think about the crash in housing prices in the Inland Empire — housing was suddenly much less expensive, but the rapid decline in prices caused a lot of heartache.

Affordable prices for real estate are not themselves a solution to poverty. Think generally about the most disadvantaged areas in Los Angeles County — property values are low, but because of low incomes, housing is still unaffordable to many, and many pay a lot (relatively) for poor quality housing. (Like any commodity, when it comes to housing price and value are related — think of those people paying $500 to rent a room in an illegally subdivided house.)

It costs real money to build good housing. High property values also translate into better public services — it may be an anomaly from our agrarian past, but governments rely on real property taxes. Many ordinary folks rely on the investments they make in real property.

Perhaps when we say that housing prices are too high, what we’re really saying is that incomes are too low.

Housing prices also make a joke out of the classic economics of supply and demand. You’d think that increasing the supply of housing would automatically lower prices, and certainly if there isn’t enough housing rents and prices will tend to increase. But if you believe the solution to high housing prices is simply to build more housing, I’ve got an apartment to rent you in Manhattan.

Many people want, need or like to live where many other people live, and so typically the most dense cities or the most dense neighborhoods in cities, where the number of units of housing is the greatest per acre, have, other things being equal, the highest rents and property values (at least on a per square foot basis).

That’s because these dense neighborhoods are typically convenient to “amenities” that people need or want, from jobs (most important) to shopping to entertainment. Supply is also not, as the economists say, “elastic”: there are always physical or legal restrictions on how much can be built in any given area.

I say that many people want or need to live near other people, because it’s not true for everyone. One mistake that people commonly make about housing is to generalize about housing needs and wants, usually based on their own. The housing policy of the whole country was misguided for decades, generations even, because of a generalization that all Americans wanted to live in single-family suburban houses.

The only good housing policy is a non-dogmatic housing policy. Beware anyone who says that everyone wants to live a single-family home in the suburbs or that everyone wants to live in an apartment in town.

Having said that, one always has to look at the realities of any given situation. In Santa Monica nearly 32% of all land in the city is zoned for single-family homes, but there are few empty single-family lots, and no matter what, virtually all new housing is going to be in some kind of multi-unit development.

It’s also not surprising that housing is expensive in Santa Monica. Many people want to live here, and it’s not only the beach or the weather that attracts them. Santa Monica was always a jobs center, but over the past 30 years Santa Monica added more than 9 million square feet of offices. We also built hotels and invested in our downtown, and employment increased in the hospitality industry and in retail. At the same time the enrollment at Santa Monica College increased significantly.

Little housing was built for these workers and students. Some say that our housing resources should go only to house current Santa Monica residents, but they ignore the reality that economic development in Santa Monica has contributed to a regional need for housing (and a local crisis in commuter traffic).

The demand for apartments in Santa Monica also reflects broad demographic trends affecting housing markets nationwide. The two largest generations in U.S. history, the Baby Boomers and the Millennials (roughly defined as those born between 1980 and 2000) are both increasing demand for apartments (and condos): the former because as they age they are moving out of now empty, single-family nests, and the latter because only the oldest of them have started to form families and look for nests to fill (and for cultural and economic reasons it appears that fewer of them than in prior generations want to live in the suburbs).

These demographic changes have resulted in changes to the form that households take. Some recent research indicates that over the next 20 years, 87% of growth in households will be households without children, and 53% of all growth will be single-person households. I see this in my own family — my 92-year-old father has lived alone since my mother died six years ago, and my 23-year-old son, when he starts graduate school at UCLA in the fall will be looking for his own apartment (on the other hand, he may not find one, which could mean that he’s won’t be living alone and that his parents won’t be empty-nesters).

The challenge for Santa Monica is to respond to the need to house people who work, study, and retire here, while at the same time providing housing for a full range of incomes, including housing for people who essentially have no incomes and would be homeless without assistance. As I said, it’s a challenge.

Thanks for reading.